Attacq Limited · JSE:ATT
Attacq — FY2014 Earnings Presentation
58 slides from Attacq's earnings presentation, September 2014
Slide 1: Annual results for the year ended 30 June 2014
Annual results for the year ended www.attacq.co.za 30 June 2014
Slide 2: Agenda
OVERVIEW 3 INVESTMENTS – SOUTH AFRICA 9 Agenda INVESTMENTS – AFRICA 14 INVESTMENTS – INTERNATIONAL 20 DEVELOPMENTS 24 35 FINANCIAL REVIEW LOOKING AHEAD 46 Q&A 48 APPENDICES 50 2
Slide 3: Overview
ATTACQ Overview
Slide 4: Attacq at a glance
ATTACQ AT A GLANCE Metric June 2014 June 2013* % change Change Total assets R18.46 billion R12.78 billion 44.5 NAV R9.91 billion R5.35 billion 85.2 Current gearing 34.0% 43.2% Shares in issue 670 965 594 449 406 150 49.3 NAVPS R14.77 R11.91 24.0 Property portfolio value R12.83 billion R9.9
Slide 5: Business strategy
BUSINESS STRATEGY Utilise balance sheet to secure and fund developments Investments: 65%* Developments: 35%* Africa International South Africa Create pipeline Increase in risk/return profile * Guideline 5
Slide 6: Strategic execution highlights
STRATEGIC EXECUTION HIGHLIGHTS • Attacq’s listing and internalisation of asset manager • Implemented all 14 transactions as detailed in the prospectus › Consolidation of international portfolio and securing a 47.3% shareholding in MAS › Increased effective shareholding in Waterfall to 85.9% › Increa
Slide 7: Capital growth fund
CAPITAL GROWTH FUND NAVPS performance metric • Emphasis on net asset value growth as opposed to yield • Income re-invested into development pipeline • NAV growth from income/development profit/revaluation • Year-on-year growth of NAVPS of 24% • Development opportunities - critical to have the flexib
Slide 8: Overview of assets
OVERVIEW OF ASSETS R’000 June 2014 June 2013 % change South Africa 10 033 292 7 389 942 35.8 Investments Africa 1 183 541 679 690 74.1 74% International 2 390 307 896 052 166.8 Total 13 607 140 8 965 684 51.8 Under development 2 891 150 1 495 512 93.3 Developments Infrastructure & vacant land 1 966
Slide 9: Investments South Africa
Investments South Africa
Slide 10: South African portfolio
SOUTH AFRICAN PORTFOLIO Number of Ave property Sector¹ GLA¹ Value¹ Vacancies² properties value m² Rm % # Rm Retail 213 675 4 114.8 1.3 6 685.8 Office & mixed use³ 131 023 3 784.1 2.0 8 473.0 Hotel 7 946 168.7 - 1 168.7 Light industrial 37 238 245.0 - 1 245.0 Total 405 707 8 312.6 3.3 16 519.5 1. GLA
Slide 11: Regional retail assets
REGIONAL RETAIL ASSETS Property Garden Route Mall Eikestad Mall Precinct¹ Brooklyn Mall² Mooirivier Mall Location George Stellenbosch Pretoria Potchefstroom Total GLA 53 363m² 49 110m² 74 509m² 52 812m² Value R1.139 billion R922.1 million R2.605 billion R1.013 billion Value/GLA R21 352/m² R18 776/m²
Slide 12: Office & mixed use assets
OFFICE & MIXED USE ASSETS Property Group 5 Lynnwood Bridge Cell C Campus Brooklyn Bridge Location Waterfall Pretoria Waterfall Pretoria Total GLA 23 139m² 59 000m² 44 200m² 25 742m² Value R517.4 million R1 597.8 million R783.3 million R637.6 million Value/GLA R22 361/m² R27 082/m² R17 723/m² R24 768
Slide 13: Lease expiry profile (GLA m²)
LEASE EXPIRY PROFILE (GLA m²) 100 000 80 000 60 000 40 000 20 000 0 Vacancy 2015 2016 2017 2018 2019 2020+ Hotel 7 946 Industrial 51 252 Office 9 389 1 596 5 421 5 957 3 347 9 308 97 405 Retail 3 317 8 152 37 854 19 544 17 611 45 202 66 581 13
Slide 14: Investments Africa
Investments Africa
Slide 15: Africa strategies
AFRICA STRATEGIES Evolution in approach • Att Africa › 31.25% stake › Greenfields retail development opportunities › Acquisition and redevelopment of retail opportunities • Mauritius › 41.8% stake › Mall of Mauritius › Focus on development of Bagatelle precinct, Mauritius › Reputable local partners
Slide 16: Att Africa
ATT AFRICA New vision • Restructured 50% of Manda Hill under Atterbury Africa post year end • Merged management teams of Atterbury Africa and African Land Investments › Atterbury Africa rebranded as Att Africa › CEO – Kevin Teeroovengadum › Financial Director – Renier van Rensburg › Internalised ass
Slide 17: Att Africa - properties
ATT AFRICA - PROPERTIES Property Accra Mall Manda Hill* Location Accra, Ghana Lusaka, Zambia GLA 19 000m² 43 400m² Fully let Fully let Status 20 000m² expansion planned 10 000m² expansion planned Value USD82.5 million USD153 million Value/GLA USD4 342/m² USD3 533/m² * Restructured under Att Africa s
Slide 18: Att Africa - developments
ATT AFRICA - DEVELOPMENTS Property West Hills Mall Achimota Mall Kumasi City Mall Location Accra, Ghana Accra, Ghana Kumasi, Ghana Phase I – 27 500m2 GLA 13 400m2 27 000m2 Phase II – 12 000m2 October 2014 End 2016 Opening date October 2015 99% let Shoprite, Palace (local) Anchor tenants Shoprite, Mr
Slide 19: Bagatelle Mall of Mauritius
BAGATELLE MALL OF MAURITIUS Property Bagatelle Mall of Mauritius Location 10km south of Port Louis, alongside M1 Motorway GLA 45 240m² Value MUR4.58 billion Value/GLA MUR101 238m² Total number of tenants 121 Anchor tenants Intermart, Monoprix, Food Lovers Market, Woolworths 19
Slide 20: Investments International
Investments International
Slide 21: International: MAS
INTERNATIONAL MAS • Consolidation of Attacq’s international assets › 47.2% shareholding › Invested a further R1.3 billion in February as part of R2.8 billion cap raising • Projected euro income stream to Attacq to fund local developments • Market value of MAS not reflected in Attacq NAV: MAS shareho
Slide 22: International: MAS strategy and share price
INTERNATIONAL MAS • MAS strategy: 24 MAS share price (JSE) Rand › 90% of portfolio income producing by end of 2016 22 › Target yield on capital invested by shareholders above 6% 20 › Strong long term growth via development of own portfolio & active asset management 18 16 14 12 Mar 13 Jun 13 Sep 13 D
Slide 23: International: MAS performance
INTERNATIONAL MAS: performance 9% €250 Millions • Current investment portfolio yielding >7% €200 core income 6% 2016 target – €150 • Strong performance on Karoo investments 90% of portfolio in income generating investment property €100 • New Waverley construction commenced 3% September 2014 on Whitb
Slide 24: Developments
Developments
Slide 25: Existing pipeline
EXISTING PIPELINE* Waterfall Other Total Total GLA 208 453m² 88 040m² 296 493m² Total capital cost R4.16 billion R1.60 billion R5.76 billion Estimated value on completion R5.61 billion R1.75 billion R7.36 billion Estimated development profit R1.45 billion R0.15 billion R1.60 billion Number of buildi
Slide 26: Waterfall bulk
WATERFALL BULK % approved % approved June 2014 bulk June 2013 bulk Approved bulk 1 752 488 100.0 1 752 488 100.0 Completed – Held 124 269 7.1 44 059 2.5 Completed – Sold 38 000 2.2 9 000 0.5 Under construction 199 016 11.3 75 304 4.3 Vacant 1 391 203 79.4 1 624 125 92.7 +164% +179% 1 391 203 1 624 1
Slide 27: Waterfall City
WATERFALL CITY New City • CBD of Waterfall and surrounds • Potentially - Gauteng CBD • 800 000m² usable bulk • Gateway to Africa • Excellent access › Allandale interchange › Bridge over N1 27
Slide 28: Waterfall City
WATERFALL CITY New City • Work, live and play • Anchored by the Mall of Africa • City around a central park of 3ha • Plan now for future potential • Sheer size of project allows for economies of scale in planning: › 800 000m2 of bulk › Sustainability and green principles › Safety › Public transport
Slide 29: Developments update
DEVELOPMENTS UPDATE Waterfall Lifestyle Premier MOP Honda - MOP Angel Shack City Lodge Type Retail Office Office DC* Hotel GLA 7 540m² 4 232m² 4 069m² 4 558m² 6 180m² Total capital cost R114.2m R81.1m R79.1m R27.5m R88.5m Est completion value R111.5m R95.2m R93.2m R30.1m R104.4m Est completion date
Slide 30: Developments update
DEVELOPMENTS UPDATE Waterfall Westcon Dräger Covidien Novartis Cummins Type DC* DC* DC* Head Office DC* GLA 8 074m² 4 674m² 11 050m² 7 055m² 20 833m² Total capital cost R86.4m R54.3m R91.6m R179.8m R139.8m Est completion value R89.2m R65.1m R109.3m R217.8m R179.3m Est completion date Sept 2014 Nov 2
Slide 31: Newtown Junction
NEWTOWN JUNCTION Johannesburg CBD Newtown Junction GLA 72 725m² Total capital cost R1.27 billion Estimated completion value R1.37 billion Completion date Opened 25 September 2014 Major tenants Nedbank, Shoprite, Pick n Pay, Ster Kinekor, Planet Fitness Effective shareholding 62.5% 31
Slide 32: The Grove Mall of Namibia
THE GROVE MALL OF NAMIBIA Klein Kuppe, Windhoek, Namibia The Grove GLA 55 000m² Total capital cost R937 million Estimated completion value R1.05 billion Estimated completion date October 2014 Major tenants Shoprite, Edgars, Woolworths, Spar Effective shareholding 31.25% 32
Slide 33: Newly secured developments
NEWLY SECURED DEVELOPMENTS Colgate Servest City Lodge Waterfall, Maxwell Location Waterfall Newtown Office Park GLA 4 241m² 6 650m² 8 000m² Total capital cost R93.7 million R113.6 million R99.4 million Est completion date August 2015 August 2015 October 2015 Effective shareholding 42.95% 85.9% 62.5%
Slide 34: Skywards
SKYWARDS PwC Gauteng Head Office comes to Waterfall • ±40 000m² • ±3 500 employees • In principle approval, subject to final agreement 34
Slide 35: Financial review
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Slide 36: Income statement
INCOME STATEMENT R’000 June 2014 June 2013 Change % change Net rental income 646 550 416 170 230 380 55.4 Gross rental income 876 850 628 532 248 318 39.5 Property expenses (230 300) (212 362) (17 938) 8.4 Operating profit 507 247 254 458 252 788 99.3 Fair value adjustments 953 192 856 298 96 894 11
Slide 37: Fair value adjustments
FAIR VALUE ADJUSTMENTS R’000 June 2014 June 2013 Change % change Total properties 919 094 782 061 137 033 17.5 Completed 325 389 419 192 (93 803) (22.4) Land 33 592 254 919 (221 327) (86.8) Properties under construction 560 113 107 950 452 163 418.9 Other financial assets 34 098 57 137 (23 039) (40.
Slide 38: Balance sheet
BALANCE SHEET R’000 June 2014 June 2013 Change % change Total assets 18 464 886 12 775 260 5 689 626 44.5 Non-current assets 16 990 440 10 311 421 6 679 019 64.8 Current assets 1 335 600 862 197 473 403 54.9 Assets held for sale – IP - 1 033 251 (1 033 251) (100) Assets held for sale – Inv 138 846 5
Slide 39: Total assets
TOTAL ASSETS R’000 June 2014 June 2013 Change % change Total properties 12 829 337 10 081 107 2 748 230 27.3 Completed buildings 7 971 591 5 238 280 2 733 311 52.2 Vacant land & infrastructure 1 966 596 2 314 064 (347 468) (15) Properties under construction 2 891 150 1 369 208 1 521 942 111.2 Held f
Slide 40: Investments
INVESTMENTS 2 500 Rm 1 977 2 000 1 500 1 000 534 439 391 340 326 500 281 262 260 258 249 243 235 218 210 139 128 112 98 0 MAS Bagatelle Nova Atterbury Other Att Africa Wingspan Rapfund African Arctospark Reach Other Mall Eventis Mauritius Land June 2014 June 2013 40
Slide 41: Debt
DEBT R’000 June 2014 June 2013 Total net interest bearing debt 6 285 955 5 522 628 Long-term interest bearing debt 6 226 221 3 872 731 Short-term interest bearing debt 449 027 1 295 713 Debt on assets held for sale - 398 573 Cash on hand (389 293) (44 389) Total assets 18 464 886 12 775 260 Gearing
Slide 42: Facilities and hedging
FACILITIES AND HEDGING R’000 June 2014 Committed facilities unutilised (Rand) 3 761 267 Total committed facilities 10 436 515 Total amount hedged of utilised debt 3 890 957 % of total utilised interest bearing debt hedged 58.3% Weighted average cost of debt 9.5% Net cash on hand 389 293 Working capi
Slide 43: Debt maturity
DEBT MATURITY Maturity of debt & interest rate hedging 2 500 40% Rm 2 000 30% 1 500 20% 1 000 10% 500 2 298 1 063 1 277 544 449 387 444 420 335 194 974 464 102 672 277 666 0 0% 2015 2016 2017 2018 2019 2020 2021 2022 Debt maturity (R) Hedge maturity (R) Debt maturity (%) 43
Slide 44: Equity
EQUITY R’000 June 2014 June 2013 Change % change Total equity 10 126 758 5 705 250 4 421 508 77.5 Attacq shareholders 9 912 191 5 352 967 4 559 224 85.2 Non-controlling interests 214 567 352 283 (137 716) (39.1) Shares in issue 670 965 594 449 406 150 221 559 444 49.3 Actual 717 393 147 522 989 885
Slide 45: NAVPS performance
NAVPS PERFORMANCE R16 24.0% R12 15.7% 12.3% 21.5% R8 6.5% 4.9% 23.0% 34.6% R4 47.8% R 10.29 R 11.91 R 14.77 R 5.49 R 2.76 R 4.08 R 6.75 R 7.08 R 7.54 R 9.16 R0 June June June June June June June June June June 2005 2006 2007 2008 2009 2010 2011 2012* 2013* 2014 * Restated 45
Slide 46: Looking ahead
LOOKING AHEAD
Slide 47: Looking ahead
LOOKING AHEAD Risks • Slower economic growth and political uncertainty • Further downgrading of SA • Increase in interest rate globally • Global macro economic uncertainty Market opportunities Insert PIC • Market consolidation • Ongoing European recovery • Positive GDP growth in Africa • Untapped ma
Slide 48: Q&A
Q&A
Slide 49: Disclaimer
DISCLAIMER This presentation and any materials distributed in connection with this presentation may include certain forward-looking statements, beliefs or opinions, including statements with respect to the company’s business, financial condition and results of operations. These statements, which con
Slide 50: Appendices
Appendices
Slide 51: Attacq property portfolio and investment overview as at 30 June 2014
ATTACQ PROPERTY PORTFOLIO AND INVESTMENT OVERVIEW AS AT 30 JUNE 2014 ATTACQ Property and Investment Developments* Holdings Retail portfolio International (excl Africa) Africa (excl South Africa) South Africa • Newtown, Jhb 62.5%: Oct 2014 • Waterfall • MAS 47.2%^ • Bagatelle Mall of Mauritius, Port
Slide 52: Issued shares
ISSUED SHARES Issued shares evolution (net of treasury shares) 670 965 594 56 657 224 29 008 499 4 883 621 12 273 188 1 796 574 11 333 142 55 172 413 50 434 783 449 406 150 Opening Pre-listing Issue on AAM ARF minority Other pre- Gen issue of Brooklyn MAS vendor Closing balance rights offer listing
Slide 53: Waterfall map
WATERFALL MAP ATTACQ
Slide 54: Portfolio overview: retail
PORTFOLIO OVERVIEW Investments: Retail Property name Location Key tenants Total GLA Valuation Value m² R’000 R/m² * Brooklyn Mall Pretoria Woolworths, Dischem, Game, Platinum Group 74 509 2 604 569 34 956 Glenfair Boulevard Pretoria Checkers, SuperSpar 18 109 362 491 20 017 Lynnwood Bridge Retail Pr
Slide 55: Portfolio overview: office & mixed use
PORTFOLIO OVERVIEW Investments: Office & mixed use Property name Location Key tenants Lease expiry Total GLA Valuation Value year m² R’000 R/m² Great Westerford Cape Town Korbitec, Teraco, Futuregrowth, CSGI Mixed 32 667 477 018 14 602 Lynnwood Bridge Offices Pretoria Adams & Adams, Sanlam, Atterbur
Slide 56: Portfolio overview: Waterfall developments
PORTFOLIO OVERVIEW Developments: Waterfall Completion Total capital Value est Est dev profit/ Property name date Total GLA % Pre-let (GLA) cost on completion revaluation m² % R’000 R’000 R’000 Maxwell Office Park* 8 301 160 300 188 423 28 123 * Premier Foods Under construction July 2014 4 232 100 81
Slide 57: Portfolio overview: other developments
PORTFOLIO OVERVIEW Developments: Other Completion Total capital Value est Est dev profit/ Property name Status date Total GLA % Pre-let (GLA) cost on completion revaluation m² % R’000 R’000 R’000 Newtown Precinct Under construction Sep 2014 72 725 >70 1 273 342 1 369 300 95 958 Lynnwood Bridge Under
Slide 58: Att Africa pipeline and portfolio
ATT AFRICA Pipeline and portfolio Attacq Property and GLA Att Africa Attributable effective location (proposed*) ownership value to date interest Status m2 % USD’000 % Accra Mall Income producing, fully let. 19 000 47 38 780 14.7 Accra, Ghana Future expansion planned West Hills Mall 27 500 45 29 850